Using Advisory Fuel rates

The easiest way to ensure that no car-fuel benefit charge (for private journeys in a company car) is payable, is to use the advisory fuel rates published by HMRC to repay any private fuel costs to your employer. The advisory fuel rates are intended to reflect actual average fuel costs and are updated quarterly.

However, the car-fuel benefit charge will still be payable if it cannot be demonstrated to HMRC that the driver of the car has paid for all fuel used for private journeys, this includes commuting to and from work. To ensure that this does not occur, employees will need to keep a log of private mileage.

The latest advisory fuel rates became effective on 1 June 2022 and the next set will take effect on 1 September 2022. Fuel rates are reviewed four times a year with changes taking effect on 1 March, 1 June, 1 September and 1 December. You can use the previous rates for up to 1 month from the date the new rates apply.

If you have a company car and your employer pays for all your petrol you will need to work out your actual private mileage for 2022-23, multiply this by the appropriate advisory fuel rate, and pay this amount to your employer.

This will avoid being charged the expensive car-fuel benefit - in many cases the tax saved will be more than the amount of your repayment to the employer.